Failure of western democracy, tensions between the US and China, the Arab Spring and other major global events.
Niall Ferguson argues that Britain’s decision to intervene in 1914 turned the conflict between Germany and Russia from a continental war into a global war.
https://youtu.be/bT81WwCix4M
Ferguson argues that the consequences of that decision by Britain in 1914 lasted 75 years, until collapse of the Soviet Union in 1989. With the benefit of hindsight, and the resurgence of Russia, I would say we still live with those consequences today.
The Scots voted firmly in favor of REMAIN but this fell far short of the English majority for LEAVE.
The Pound fell this evening to its lowest level since the 1980s.
Peter Kenyon at NPR:
Britain’s bookies say the smart money is on Remain.
“At the moment, Remain is the odds-on favorite at 1 to 4, so that equates to about a 76 percent chance of the U.K. voting to remain in the EU,” says Jessica Bridge, spokeswoman for Ladbrokes, one of the U.K.’s larger betting firms.
The Leave side, meanwhile, “is drifting like a barge,” she says, with the odds 3 to 1 against.
Source: Britain’s Bookies: Odds Are U.K. Will Stay In E.U. : Parallels : NPR
Cautious optimism has evaporated after poor recent polls favoring a BREXIT. I hope that sanity prevails but, as the saying goes: “Hope isn’t a strategy”.
Better to have a Plan A and a Plan B to cope with the two alternatives. But if enough investors decide their money is safer in the bank, then expectations of a fall are likely to become a self-fulfilling prophecy.
The S&P 500 does not appear unduly alarmed but a sharp fall on 13-week Money Flow warns of selling pressure. Reversal below 2000 would warn of another test of primary support (1820 to 1870).
Dow Jones Industrial Average shows a similar picture. Breach of medium-term support at 17400 to 17500 would warn of another test of primary support at 15500 to 16000.
A CBOE Volatility Index (VIX) spiked to 20, indicating increased market risk. Long-term measures remain unaffected.
Germany’s DAX retreated below medium-term support, warning of another test of primary support. 13-Week Money Flow below zero suggests a primary down-trend.
The Footsie broke support at 6000 warning of a test of 5500. Reversal of Money Flow below zero would suggest a primary down-trend.
* Target calculation: 6400 + ( 6400 – 6000 ) = 6800
The Shanghai Composite Index continues to range between 2700 and 3100.
Japan’s Nikkei 225 Index broke support at 16000 and its lower trend channel, warning of another decline.
* Target calculation: 15000 – ( 18000 – 15000 ) = 12000
India’s Sensex remains bullish, with a short retracement below 27000. Bearish divergence on 13-week Money Flow would end if the descending trendline is penetrated.
The ASX 200 broke medium-term support at 5200, warning of another test of primary support at 4750. Expect support at the former level of 4900 to 5000 but it is questionable whether this will hold. Combination of a seasonal sell-off and BREXIT fears are going to test buyers’ commitment.
The Banks Index fell sharply and breach of support at 7200 would offer a target of 6400*.
* Target calculation: 7200 – ( 8000 – 7200 ) = 6400
Health Care is experiencing a strong sell-off, led by CSL. This is a good long-term stock but exposure to the UK/Europe has spooked the market.
By Steven A. Cook, Amr T. Leheta:
The weaknesses and contradictions of authoritarian regimes are at the heart of the Middle East’s ongoing tribulations. Even the rampant ethnic and religious sectarianism is a result of this authoritarianism, which has come to define the Middle East’s state system far more than the Sykes-Picot agreement ever did.
The region’s “unnatural” borders did not lead to the Middle East’s ethnic and religious divisions. The ones to blame are the cynical political leaders who foster those divisions in hopes of maintaining their rule. In Iraq, for instance, Saddam Hussein built a patronage system through his ruling Baath Party that empowered a state governed largely by Sunnis at the expense of Shiites and Kurds. Bashar al-Assad in Syria, and his father before him, also ruled by building a network of supporters and affiliates whereby members of his Alawite sect enjoyed a privileged space in the inner circle. The Wahhabi worldview of Saudi Arabia’s leaders strongly encourages a sectarian interpretation of the country’s struggle with Iran for regional hegemony. The same is true for the ideologies of the various Salafi-jihadi groups battling for supremacy in Syria, Iraq, and Yemen…..
Source: Don’t Blame Sykes-Picot for the Middle East’s Mess | Foreign Policy
Jamie McIntyre on Russian actions in Syria:
……Last month at the prestigious Munich Conference on Security Policy, [Senate Armed Services Chairman Sen. John McCain] blasted the “cessation of hostilities” agreement hammered out between Moscow and Washington, as simply playing into Putin’s hands.
“It is no accident that Mr. Putin has agreed on a cessation of hostilities when he did. We have seen this movie before in Ukraine: Russia presses its advantage militarily, creates new facts on the ground, uses the denial and delivery of humanitarian aid as a bargaining chip, negotiates an agreement to lock in the spoils of war, and then chooses when to resume fighting. This is diplomacy in the service of military aggression,” McCain said.
Source: Source: U.S. ‘surprised’ by Russia pullout from Syria | Washington Examiner
Susan Glasser on George Kennan, author of the famous Long Telegram that formed American policy during the Cold War:
….Based in Moscow a few years later, Kennan saw the historical contradictions that undermined the foundation of the Soviet regime — while at the same time giving it a veneer of power. Russians were “used to extreme cold and extreme heat, prolonged sloth and sudden feats of energy, exaggerated cruelty and exaggerated kindness, ostentatious wealth and dismal squalor, violent xenophobia and uncontrollable yearning for contact with the foreign world, vast power and the most abject slavery, simultaneous love and hate for the same objects.” Looking for an insight into the forces competing for political supremacy in Russia today, you could do far worse than Kennan’s observations.
Today we would call that bi-polar.
……”The strength of the Kremlin lies largely in the fact that it knows how to wait,” Kennan wrote. “But the strength of the Russian people lies in the fact that they know how to wait longer.”
Michael A. McFaul, Stanford University professor of political science; director and senior fellow, Freeman Spogli Institute for International Studies; Peter and Helen Bing Senior Fellow, Hoover Institution; Stanford University, former ambassador to Russia (2012 – 2014).
Colin’s Comment:
Here is what I see as the big picture:
Vladimir Putin’s worst nightmare — a trucker-Maidan.
Dmytro Homon writes:
First, the protest is spontaneous and is not coordinated from a single center. For that reason, the police have been unable to shut it down because other drivers immediately take the place of the ones detained.
Second, the protestors are not the usual “fifth column” opposition by intellectuals. These are, for the most part, Putin’s voters — tough guys who in elections vote for stability…….
Third, all Russians clearly understand the complaints of the truck drivers. They boil down to the fact that greedy authorities are trying to take the shirt off the back of simple workers…..
For these reasons the usual methods of Russian propaganda are not very effective. The postings of the Olgino trolls (professional commentators from the “troll factory” in the Olgino district of St. Petersburg — Ed.) that these protests are organized by the opposition look ridiculous. Attempts by mass media to ignore the truckers completely are equally ineffective because they have become a major topic in social networks……
Meanwhile, more and more trucks have been arriving to Moscow. What will happen next is a question with no answer yet. In fact, even the truckers themselves do not know what to do after the blockade.
If the Russian authorities use brute force, this risks repeating the fate of Yanukovych. Putin, however, has nowhere to flee from the Kremlin. Well, perhaps to Syria…..
Read more at Russia’s protesting truckers and Putin | Euromaidan Press
